The shares fell 2.9 percent to 107.27 reais at 11:41 a.m.
in Sao Paulo. A close at that level would be the lowest since
April 17. It was the biggest loser on the MSCI Brazil/Consumer
Staples Index, which rose 0.9 percent.

The Sao Paulo-based retailer’s adjusted net income was
236.6 million reais ($118.2 million) in the first quarter,
according to data compiled by Bloomberg after the company
released earnings yesterday after markets closed. The average
estimate of eight analysts surveyed by Bloomberg was 259.5
million reais.

Non-recurring expenses including the opening of new stores
and a brand’s expansion to new regions “impacted the food
division,” Ricardo Boiati, a Sao Paulo-based analyst at Banco
Bradesco SA, wrote today in a research note to clients. Boiati
downgraded the stock to an equivalent of hold, saying the
results brought no surprises and citing a “rich” valuation.

Pao de Acucar trades at a 21.9 price-to-earnings ratio for
the next four quarters while the Ibovespa is at 11.3 times,
according to data compliled by Bloomberg.